It’s been a bad start to the week for the TSX, as energy, finance, gold, and the healthcare sectors all took a dive. The latter sector was weighed down by the plunge in CannTrust Holdings (TSX:TRST)(NYSE:CTST), which failed to live up to its name this week. The cannabis producer has been hit by a Health Canada audit that concluded the company had been running an extra five greenhouse rooms without a licence and put a kibosh on the estimated 5,200 kg of marijuana the company produced.

Although cannabis legalization is new to many countries and elusive to many more, the cannabis market is growing at an astounding rate. In the U.S. alone, approximately 7 per cent of Americans are using cannabidiol (CBD) for many purposes, which leaves room for the industry to grow to $16 billion by 2025.

Hexo Corp (TSX:HEXO) is testament to how quickly things can change in equity markets in general, and in an industry as volatile as the marijuana industry in particular. Just a few months ago, the firm seemed well positioned to become marijuana royalty. However, a round of disappointing financial results have played a critical role in dragging its stock price down.

Since late April, shares of Hexo are down about 40%. Still, there are several reasons why Hexo may still be worth considering. Let’s remind ourselves of two of these reasons.

Cannabis stocks have been some of the hottest investments to own in recent years, many including Canopy Growth (TSX:WEED)(NYSE:CGC) have generated incredible returns. Since going public in April 2014, Canopy has gained a whopping 1,620%, and despite growing concerns over the viability of the legal cannabis industry, there are signs of further growth to come.

As the rough ride endured by online retail behemoth Amazon.com demonstrates, there will always be hiccups for any company operating in an emerging industry. Even after the tech bust, global financial crisis, European sovereign debt crisis, and oil crash, it has returned over 116,000%, after allowing for stock splits, since its 1997 IPO.

For more than three years, the marijuana industry has been showing investors the green. Fortunate investors who bought into what are today's most popular pot stocks back in 2016 are likely up by a quadruple-digit percentage. And it's possible this could be just the beginning, with Wall Street calling for a fourfold to sixfold increase in worldwide sales over roughly the next decade.

One of the major events on the horizon for the marijuana industry is that before the end of the year, we’re going to see a whole new set of marijuana products be made available to the Canadian public: namely, edibles. While Canada legalized marijuana products federally last October, edibles are still technically illegal (although they aren’t exactly hard to find on the grey and black markets). But this coming December could be another huge run for marijuana stocks.

The big day, for 2019 at least, is about five months away for Canadian marijuana stocks. After officially legalizing recreational marijuana on Oct. 17, 2018, Canada's regulatory agency Health Canada expects derivative products to first make their way onto dispensary-store shelves by mid-December. Derivatives are, for example, non-dried-flower products, such as vapes, edibles, topicals, concentrates, and nonalcoholic infused beverages.

Cannabis stocks were faced with yet another tough day on Wednesday, after weeks of losses across North American markets.

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, dropped 2% to 225.5 points on Wednesday. The Horizons Marijuana Life Sciences Index ETF was down 0.7% to C$17.70. The OTCQX Cannabis Index inched up 0.2% at 716.3 points.

Buds

Despite the overall lags, a number of stocks shone on Wednesday.

Although the ride can be bumpy at times, there's no denying that the marijuana industry is slowly but surely maturing before our eyes. With Canada having legalized recreational marijuana, and two-thirds of U.S. states now allowing medical marijuana prescriptions from a physician, the breadth of legal cannabis is greater than it's ever been.

According to various Wall Street projections, the global pot industry could see a fourfold to sixfold increase in sales between now and 2029/2030. If these estimates prove accurate -- and there's reason to believe they're attainable given the tens of billions of dollars in sales on the black market each year -- the cannabis industry could be a once-in-a-generation growth opportunity for investors.

The surprise firing of Canopy Growth’s (TSX:WEED)(NYSE:CGC) CEO Bruce Linton has been applauded by many analysts as an opportunity for Canada’s largest licensed producer (LP) to finally exercise some fiscal discipline.

Prior to the legalization of recreational marijuana, Canadian cannabis names have been able to serially raise shares and spend the funds carte blanche on acquisitions, which may or may not add any value to the core business. Because funding was so cheap, LPs were able to pursue every vertical under the sun without a clear strategy toward profitability.